India's NSE IPO draws over $10 billion, traders eye modest listing pop

The National Stock Exchange of India’s IPO drew more than $10 billion by the final day of bidding on Monday, as investors look to tap into a boom in public listings in Asia’s third-largest economy.

The $2.3 billion IPO, the country’s biggest after Hyundai Motor India’s $3.3 billion offering, received bids for 505.81 million shares, 5.71 times the 88.64 million shares on offer after three days of bidding, exchange data showed.

NSE shares will likely begin trading on Thursday, marking the culmination of a decade-long effort by India’s biggest stock exchange operator to enter public markets.

The IPO comes at a time when India’s primary market is picking up, with billionaire Mukesh Ambani’s Jio Platforms likely to list later this year in what could be the country’s biggest-ever stock offering.

Qualified institutional buyers led demand at the NSE IPO, bidding for 12.68 times the number of shares set aside for them. Non-institutional and retail investor portions were subscribed 6.55 times and 1.39 times, respectively.

NSE’s $2.3 billion IPO fully subscribed, spotlight shifts to Sept. 24 debut

The strong institutional demand signals investors’ willingness to look past a recent slowdown in the derivatives segment and bet on long-term growth prospects for the Indian capital market, analysts said.

India’s largest bourse has a 93% share in the cash market and nearly 75% in options. Investors on the exchange jumped 40% over two years to 129.09 million as of March end.

However, regulatory tightening, taxation and a new closing auction have hit derivatives trading.

“The decline in derivatives volume is a phenomenon that has been playing out since 2024…. From a long-term perspective, the volumes should still trend higher and NSE’s smaller businesses outside the derivatives segment should also be able to contribute materially to earnings,” said Vipul Bhowar, executive director and head of equities at Waterfield Advisors in Mumbai.

Grey market hints at listing gains

The premium for NSE shares in the grey market indicate gains of 2% to 5% on trading debut. The grey market is an unregulated market that allows investors to trade IPO shares before the official listing.

NSE has set a price band of 1,700 rupees to 1,785 rupees apiece for its shares and is seeking a valuation of up to $46 billion, which is 15% to 20% lower than the valuation sought in pre-deal roadshows.

“The lower-than-anticipated valuation limits the downside risk for NSE and if the stock falls below IPO price after listing, it should be seen as a buying opportunity,” Bhowar said.

Peer BSE listed in 2017. Its shares have surged more than 30 times since their trading debut.